Germany's leading online lottery product provider ZEAL Network SE achieved significant growth in revenue and EBITDA in the first nine months of 2024.
Consolidated revenue grew 41% to 121 million euros (2023: 86 million euros). EBITDA growth even outpaced revenue, increasing by 51% to 35 million euros (2023: 23.2 million euros).
"We are proud of the excellent business development this year, which is reflected in the significant growth in revenue, EBITDA, and new customer acquisition. The efficiency improvements and scale effects in our business model are evident in the substantial increase in profitability.
"Despite the jackpot situation in the third quarter not being as optimistic as at the beginning of the year, our lottery revenue has grown significantly by 42% compared to the same period last year. Another highlight of the third quarter was the launch of our new charity lottery Traumhausverlosung, which far exceeded our expectations," said ZEAL CFO Sebastian Bielski.
ZEAL's revenue growth in the first 9 months of 2024 was primarily due to strong performance in the lottery business: lottery revenue increased by 35% to 107.6 million euros (2023: 79.4 million euros), and lottery billing grew by 17% to 743.1 million euros (2023: 633.2 million euros).
This growth was supported by a 17% increase in the average number of active monthly customers (1.347 million). The average billing per active user remained stable compared to the previous year. Additionally, ZEAL improved its gross margin by two percentage points to 14.5% (2023: 12.5%) by altering its product mix and optimizing profit margins.
Since the beginning of this year, ZEAL has once again significantly expanded its customer base. The number of newly registered customers grew by 56%, reaching 807,000 (2023: 518,000), setting a new record in ZEAL's history. In the third quarter of 2024, the number of new customers grew by 28%, despite not reaching the highest jackpots of Eurojackpot and Lotto 6aus49 compared to the same period last year.
Thanks to more effective marketing measures, the cost of acquiring each new registered customer (cost per lead, CPL) decreased by 24% to 35.54 euros (2023: 46.81 euros).
Other operating expenses increased by 29% to 63.2 million euros (2023: 48.8 million euros). Due to strategic decisions to use the favorable jackpot situation in the first half of 2024 to accelerate and efficiently grow the customer base, marketing expenses in the first nine months of this year increased by 20% to 36.9 million euros (2023: 30.7 million euros). Direct operating costs increased by 12.4 million euros (2023: 8.6 million euros), attributed to increased payment processing costs, customer identification costs, and commissions paid to external developers to expand the game portfolio.
Due to improved efficiency and further development of scale economies, EBITDA disproportionately grew with strong sales, reaching 35 million euros in the first three quarters of 2024, up 51% from the same period last year (2023: 23.2 million euros). EBIT was 28.9 million euros, even 74% higher than the previous year (2023: 16.6 million euros).
